Client news update - July 2025

The government has introduced the Pension Schemes Bill, which it says will make pensions easier to understand and manage as well as drive better value over the long term.

The bill will work to ensure savers get good returns and drive economic investment by requiring defined contribution (DC) schemes to prove they are value for money to avoid underperforming schemes.

It also aims to simplify retirement choices by all pension schemes offering default routes to a retirement income and consolidate and professionalise the Local Government Pension Scheme (LGPS).

In addition, it will bring together small pension pots worth £1,000 or less into one scheme certified as delivering good value and create new rules for multi-employer DC scheme ‘megafunds’ of at least £25 billion.

This is so that bigger pension schemes can drive down costs and invest in a wider range of assets and increase flexibility for defined benefit (DB) pension schemes to safely release surplus worth £160 billion, the government said.

Liz Kendall, Work and Pensions Secretary, said:

‘Hardworking people across the UK deserve their pensions to work as hard for them as they have worked to save, and our reforms will deliver a huge boost to future generations of pensioners.

‘The bill is about securing better value for savers’ pensions and driving long-term investment in British businesses to boost economic growth in our country.’

Internet link: GOV.UK

The minimum amount someone needs in retirement has fallen, amid lower energy prices and people’s changing expectations, according to a report from the Pensions and Lifetime Savings Association (PLSA).

This year, the cost of a minimum retirement living standard for a one-person household has decreased by £1,000 per year to £13,400, says the PLSA. For a two-person household, it is £21,600, down from £22,400 a year previously.

For a moderate lifestyle, a single person would need £31,700, up by £400 from £31,300 previously, while two people would need £43,900, up by £800 from £43,100 previously.

For a comfortable retirement, a single person would need £43,900, up by £800 from £43,100 previously, and a two-person household would need £60,600 – a £1,600 annual increase from £59,000.

Zoe Alexander, Director of Policy and Advocacy at the PLSA, said:

‘Everyone’s situation is different, and contributions should be manageable. But if your circumstances improve, even small increases can make a big difference to your future.

‘This year’s findings show that costs can go down as well as up. But planning matters more than ever. Whether you’re on your own or sharing your future with someone else, these standards are here to help savers picture and plan their retirement – with real figures, real choices and real flexibility.’

Internet link: PLSA website

If you’re approaching retirement and aren’t already working with one of our financial planners, we offer an initial meeting at our cost.

Taxpayers are being urged to check their online HMRC account after scammers attempted to defraud the tax authority using individuals’ data and login details.

The Low Incomes Tax Reform Group (LITRG) is also reminding people of the importance of being vigilant and taking care of personal data.

HMRC recently announced that criminals had targeted the online tax accounts of nearly 100,000 taxpayers to try to make false tax refund claims.

In some cases, HMRC have said that criminals gained people’s login credentials and made use of existing online tax accounts. But, in others, they gained personal data that enabled them to set up new online tax accounts via the Government Gateway.

HMRC have locked down the compromised accounts as a precaution. They are writing to those affected with details on how they can regain access to their accounts.

Joanne Walker, Technical Officer at LITRG, said:

‘HMRC have confirmed that they were the victim of online scammers who tried to defraud them of money using the details of individual taxpayers.

‘While HMRC say this attack has not resulted in any tax-related financial loss for individual taxpayers, it is a timely reminder that fraud is an ongoing threat.’

Internet link: LITRG website

The tax gap estimate was 5.3% for the 2023/24 tax year, according to the latest data from HMRC.

The tax gap is the difference between what tax is expected to be paid and actually paid.

HMRC collected £829.2 billion in the 2023/24 tax year representing 94.7% of all tax due, leaving £46.8 billion unpaid.

However, HMRC revised the figures upwards for 2022/23, from 4.8% (£39.8 billion) to 5.6% (£46.4 billion). It also warned that the latest figures may be revised as more data becomes available.

Some of the key findings from this year’s calculations show:

• Small businesses represent the largest proportion of the tax gap (60%).
• Corporation Tax accounts for 40% of the total tax gap.
• Failure to take reasonable care (31%), error (15%) and evasion (14%) are among the main behavioural reasons for the overall tax gap.

Ellen Milner, Director of Public Policy, said:

‘These figures show the stubbornness of the tax gap and how optimistic the government’s target of a £7.5 billion reduction by 2029/30 is.

‘While large businesses and wealthy individuals are often accused of not paying enough tax these figures suggest that their total share of the tax gap is not much more than a quarter of that of small businesses.

‘The small business figures reflect big upward revisions from HMRC a year ago as a result of a random enquiry programme carried out in 2020/21, which identified greater inaccuracy and non-compliance than previously forecast.’

Internet link: HMRC press release CIOT website

HMRC has published the latest issue of the Employer Bulletin. The June issue has information on various topics, including:

• PAYE Settlement Agreement calculations 2024 to 2025
• organised labour fraud — the supply of labour through Employment Intermediaries
• mandating the reporting of Benefits in Kind and expenses through payroll software
• Spotlight 68 — using prepaid debit cards for profit extraction to reduce profits and disguise income
• future changes to Statutory Sick Pay
• parents of teens reminded to go online to extend their Child Benefit claim.

Internet link: GOV.UK

HMRC is warning those earning extra income through a side hustle to check if they need to register for self assessment and file a tax return.

Side hustles can be any additional income stream, from online selling to content creation, from dog walking to property rental. It also includes gains or income received from cryptoassets.

Anyone who earns over the £1,000 threshold may need to register for self assessment and complete a tax return.

There is a checker tool on GOV.UK for those who aren’t sure if they meet the criteria. If they do and are new to self assessment they will need to register to receive their Unique Taxpayer Reference.

Guides for side hustlers can also be found at taxhelpforhustles.campaign.gov.uk.

Myrtle Lloyd, HMRC’s Director General for Customer Services, said:

‘Whether you are selling handmade crafts online, creating digital content, or renting out property, understanding your tax obligations is essential. If you earn more than £1,000 from these activities, you may need to complete a self assessment tax return.

‘Filing early puts you in control – you will know exactly what you owe, can plan your payments, and avoid the stress of the January rush. You don’t need to pay immediately when you file – you have until 31 January to settle your tax bill.’

Internet link: HMRC press release

More than one in four UK businesses have been the victim of a cyber-attack in the last year with many risking ‘sleepwalking’ into disruption, according to a new report.

The survey conducted by the Royal Institution of Chartered Surveyors (RICS) found that 27% of companies said their building had suffered a cyber-attack in the last 12 months, up from 16% a year ago.

Almost three-quarters of business leaders believe that a cybersecurity incident will disrupt their business in the next 12 to 24 months, the survey found.

The paper identifies operational technology such as building management systems, CCTV networks, Internet of Things (IoT) devices and access control systems as risk areas.

It also notes concerns that some buildings use outdated operating systems (OS). A building opened as recently as 2013 could conceivably use Windows 7; an OS that hasn’t received security updates from Microsoft in over five years.

Paul Bagust, Head of Property Practice at the RICS, said:

‘Buildings are no longer just bricks and mortar, they have evolved into smart, interconnected digital environments embracing increasingly sophisticated and ever-evolving technologies to enhance occupier experience.

‘It is inconceivable to imagine a world where technology will not continue to pose a growing risk to a building’s operation, and it is equally impossible to consider that the management of digital risks will not be needed as an imperative measure to safeguard the future of a building and prevent systems from being compromised.  

‘Failure to identify these growing digital challenges and incorporate security countermeasures risks businesses sleepwalking into cyberattacks.’

Internet link: RICS website